MONTREAL - Newsprint shipments by North American producers continued to decline in May despite an almost 20 per cent year-over-year increase in exports, according to an industry organization.

Overall, newsprint shipments from North American producers fell 1.1 per cent in May from the prior year but were up 5.7 per cent from April, the Pulp and Paper Products Council said Tuesday.

North American demand was down 8.9 per cent in May, or 10 per cent in the first five months of the year. Exports were up 11 per cent, with higher demand in Asia, particularly India, and in South America.

Exports account for one-third of all shipments by North American producers.

Paul Quinn of RBC Capital Markets wrote in a report that the temporary idling of 750,000 tonnes of annual export capacity at a Russian mill in December helped North American producers win back some market share.

North American producers will also benefit from a permanent removal of about one million tonnes of European newsprint capacity in 2013, he added.

Quinn said last year's strong gains in North American commercial printing demand masked the steep declines of newspapers which bought 5.8 per cent less newsprint than the prior year.

The outlook is uncertain this year amid reports that some retailers are looking to switch to higher-quality supercalendered paper. Commercial printing demand for newsprint was down 0.7 per cent in May.

North American newsprint prices are down $35 per tonne year-to-date.

Quinn said an attempt to increase prices by $40 per tonne in July "died a quick death" as the leading newsprint producer, Resolute Forest Products (TSX:RFP), didn't join the move to higher prices.

Resolute leads with 37 per cent of North American newsprint capacity, followed by Kruger and White Birch with 14 and 13 per cent respectively.

The industry has been pressured by the start last August of White Birch's Stadacona mill, which added 250,000 annual tonnes of newsprint capacity.

Several producers have cut capacity by closing mills or older paper machines. Resolute reduced some capacity but also restarted its Gatineau plant in May.

The mill is a lower-cost operation due to a new labour agreement, the use of a single-paper machine and a co-generation power plant.

The facility will employ 130 workers, down from 330 when it was shut down in April 2010.

Chief executive Richard Garneau has said the mill will produce newsprint that can be sold in North America or for export, a market that has grown to represent 47 per cent of company sales.